Sunday, November 13, 2011

Technocrats 'Will Boost Investor Confidence' - 13th Nov 2011

Investors will be reassured by the appointment of so-called technocrats to run Italy and Greece, but no one is pretending the countries' problems have become any less severe.

Both have too much debt and face a painful, drawn-out process of national budgeting to reduce those debts while trying not to choke off growth in their economies.

The appointment of Lucas Papademos as a caretaker prime minister of Greece and the succession of Mario Monti to lead Italy means each country will be run by individuals apparently free of the shackles of party politics and unconcerned by how the difficult decisions they will have to make will affect their chances of re-election.

The markets gave up on Greece a long time ago and Mr Papademos faces a mammoth task to rebalance its shrinking economy in the relatively short period in which he is expected to serve.

But confidence in Italy remains salvageable and Mr Monti takes over an economy that is still growing and boasting below EU average unemployment - even if its 1.9trn euros debt is 1.2 times the size of the value of its economy in any one year.

Royal Bank of Scotland chief European economist Jacques Cailloux told Sky News that Mr Papademos and Mr Monti were both "founding fathers of the European Monetary Union. Read More

Technocracy is a form of government where technical experts are in control of decision making in their respective fields. Engineers, scientists, health professionals, and those who have knowledge, expertise or skills would compose the governing body. In a technocracy, decision makers would be selected based upon how knowledgeable and skilful they are in their field.

Technical and leadership skills would be selected through bureaucratic processes on the basis of specialized knowledge and performance, rather than democratic election by those without such knowledge or skill deemed necessary.

In 1932, Howard Scott founded Technocracy Incorporated, and proposed that money be replaced by energy certificates denominated in units such as ergs or joules, equivalent in amount to an appropriate national energy budget, which could be divided equally among all members of a North American continental Technate. The group argued that apolitical, rational engineers should be vested with authority to guide an economy into a thermodynamically balanced load of production and consumption, thereby doing away with unemployment and debt.

The technocracy movement was highly popular in the USA for a brief period in the early 1930s, during the Great Depression. But by the mid-1930s, interest in the movement was declining. Most historians attribute the demise of the technocracy movement to the rise of Roosevelt's New Deal., a more democratic method of accomplishing the planning and economic reconstruction that the technocrats had called for. The authoritarian, elitist, and even fascist overtones of the technocracy movement undermined its popular appeal as a political movement.